Selling Shoes in Africa!

“What on earth has this got to do with Innovation Training for SMEs?” I hear you ask.
Well a lot, as it happens.

It’s an old story but still one of my favourites in the ‘half glass full’ genre of marketing tales. Apparently, it all started in the late 19th century when the manufacture of footwear at scale was exploding in an increasingly industrialised Great Britain and one of the pioneers in the field, Bata, was aggressively on the lookout for new markets … throughout Europe and even
further afield.

The ‘legend’ goes that two company representatives were dispatched to the vast continent with instructions to scout out opportunities, with one going to the West Coast and the other travelling down the East Coast.

After conscientiously exploring the massive virgin territory they filed contrastingly different reports about the prospects there.

The first reported to head office “No one wears shoes here … so no opportunity for sales”.

His counterpart however saw it differently advising “No one wears shoes here … so a massive opportunity to make sales!”

I think you can see where I’m coming from here.

Everyone seems to agree that Innovation (read also related training) is a must have in an increasingly challenging 21st century economy to achieve sustainability for all types of businesses in this country.

What’s more the added impetus of COVID and the need for all businesses to recover in a post-pandemic economy simply reinforces this situation.

So why is the SME sector, which is responsible for well over 90% of all businesses (by number) and employs a similar or larger share of employees, completely overlooked by universities and other training providers?

Talk about needing shoes … check out the table below of business size measured by employment as at June 2019:
Employees Firm Count %
0–19 (small) 2,314,647 97.4
20–199 (medium) 56,835 2.4
200+ (large) 4,271 0.2
Total 2,375,753 100.0
Source: ABS Counts of Australian Business 8165.0, Table 13, February 2020 and ASBFEO Calculations (Excludes nano businesses with no GST role)

Before you tell me all the challenges let me summarise my own research findings here in NSW.

Firstly, SMEs are usually not in the financial position to finance perceived risky projects with long term prospects. And secondly, these days staff are increasingly thin on the ground so there is limited opportunity to allocate labour to non-core activities.

Overseas a major SME initiative by the OECD a decade ago trying to replicate the highly successful German Mittelstand model failed miserably.
Interestingly they concluded that Culture was a major contributor to the failure of the experiment.

It is tempting to suggest this finding is also a factor in Australia’s current malaise. Certainly, the lack of political interest in Innovation by all levels of government in the post Turnbull era is unhelpful.

But, can we change things?

I think it would not be unfair to suggest that in Australia nearly all would be Innovation trainers have tended to focus on their ability to attract government funding rather than addressing the national’s real need for increased skills in this area.

Reflecting on our early history their current approach is analogous to selling tools and supplies to ‘would be’ gold prospectors … rather than participating in the far riskier task of actually finding elusive gold deposits.

And this situation is further compounded by a lack of ‘early stage’ VC funding – of course lack of capital for R&D has always been a challenge in this country.

I believe the current approach to Innovation Training for SMEs will need a complete turnaround of funding policy by all levels of government to deliver the much needed and talked about ‘Kick-start’ to our post-COVID economy.

Dr Andrew M Connery is the Director of Innovation at CTPM Australasia and has been active online since 2001. Andrew completed his PhD at the UOW’s Sydney Business School in 2015 his doctoral dissertation ‘Overcoming Barriers to the Introduction of Perceived Disruptive Innovations in to Rigid Efficient Systems’.

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